Legal Question in Civil Litigation in California

You are correct in not cancelling the insurance; moreover, i am sure that having insurance is part of the loan agreement so if you cancelled the car could be repossesed. If you tell a tow truck company the facts of the case, I doubt they would want to tow the car because ownership is unclear.

Who is the legal owner is muddled. The car is registered in your wife's name but it clearly was intended to be owned by the step-mother and what you really were doing was acting as a co-signer on the loan. So while your wife might have legal title [actually the lender probably has the actual title subject to the loan being paid off], the step-mother has equitable title. The only thing you probably can do tha would defilnitely succeed is to sue her for the past payments, but you could not collect on the future payments until they actually are due. If you stop making payments the vehicle ends up repossessed and you have gone through all of the problems with nothing to show for it. By setting up this complicated purchase situation you have painted yourself into a corner.